STAMFORD, Conn., October 18, 2025 — U.S. enterprises are changing the way they carry out application development and maintenance (ADM), including closer engagement with service providers, as AI opens up new possibilities for efficiency and agility, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm.
The 2025 ISG Provider Lens® AI-Driven ADM Services report for the U.S. finds that organizations are embedding AI and automation into every layer of ADM operations to make applications more resilient and adaptable to new requirements. As they adopt this approach, they are seeking outcome-focused contracts with service providers that tie performance to measurable results such as faster release cycles, higher system availability and improved user satisfaction.
“AI is reshaping how U.S. enterprises develop, manage and modernize applications,” said Shafqat Azim, ISG partner and Americas lead, Digital Transformation. “Organizations are transforming ADM from a reactive support model into a proactive function that directly supports business growth and innovation.”
Companies in the U.S. are enhancing the performance and reliability of ADM workflows with AI-based observability, predictive analytics and automation, the report says. AI-enabled platforms automate performance tracking, business metric monitoring and incident prediction and response in real time. These capabilities significantly reduce mean time to repair (MTTR) and improve adherence to service-level agreements (SLAs). Companies in regulated sectors such as healthcare and financial services are adopting these tools to maintain compliance while improving uptime and user experience.
These trends are also redefining how U.S. organizations approach legacy systems, ISG says. Enterprises are using AI-assisted code analysis and refactoring to streamline application modernization projects, enabling faster migration to cloud-native and microservices architectures. They increasingly use GenAI for reverse engineering, test case generation and documentation, helping teams finish transformation projects faster while improving quality.
Application quality assurance (QA) is becoming a critical piece of the new approach to ADM, the report says. Enterprises are replacing static QA processes with continuous testing and AI-driven quality engineering (QE) frameworks. Automated test creation, self-healing scripts and cognitive QA ensure that applications stay consistent and reliable throughout rapid release cycles. Domain-specific QA tools are gaining momentum as enterprises in sectors such as banking, retail and healthcare test applications for compliance and customer experience.
“U.S. enterprises expect ADM services to deliver continuous innovation, resilience, and measurable value,” said Akhila Harinarayan, manager and principal analyst, ISG Provider Lens Research, and lead author of the report. “By applying AI across the ADM lifecycle, providers are helping clients achieve faster modernization, improved reliability and a sharper competitive edge.”
The report also explores other ADM trends in the U.S., including the growing role of hyperautomation and AI for operations (AIOps) in application management and the rise of intelligent DevSecOps frameworks for proactive governance and compliance.